Backblaze, Inc. (BLZE)
AI stock analysis · as of Jun 23, 2026
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Backblaze (BLZE) is a subscale cloud storage challenger to the hyperscalers, with two products: a mature Computer Backup business (~3% growth) and a faster-growing B2 Cloud Storage platform (+26% YoY) now being repositioned as AI-infrastructure adjacent. A landmark $335M multi-year CoreWeave AI storage contract has re-rated the stock ~75%+ and pushed it above the analyst consensus target. The core investment question is whether B2/AI traction plus visible operating leverage (net loss narrowed from $59.7M in 2023 to $25.6M in 2025; FCF positive at $11.3M) can compound into durable profitability before hyperscaler competition, dilution, and execution risk on large contracts catch up.
valuationExpensive on traditional metrics — forward P/E ~70x, P/S 4.7x, P/B 8.3x, and negative EV/EBITDA — but defensible if 26% EBITDA margin target and CoreWeave-led revenue acceleration materialize; current price already discounts a successful AI pivot.
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Bull case
- · B2 Cloud Storage growing 26% YoY vs 3% in Computer Backup — mix shift is mechanically lifting blended growth and gross margin (gross margin expanded from 48.9% in 2023 to 60.9% in 2025).
- · Loss reduction is dramatic: net loss compressed from -$59.7M (2023) to -$48.5M (2024) to -$25.6M (2025), and the company now generates positive FCF ($11.3M latest), validating operating leverage from the 2024/2025 restructurings.
- · $335M CoreWeave AI storage contract is transformational relative to a $146M revenue base, providing multi-year visibility and credentialing BLZE as a neocloud/AI infrastructure vendor.
- · Q1 2026 beat with raised guidance including a 26% EBITDA margin target signals management confidence in sustaining the inflection.
- · Recent analyst upgrade (Craig-Hallum) with 1 upgrade and 0 downgrades in 90 days; analyst high target $15.9 suggests upside scenario validation.
- · IDC pegs IaaS cloud storage TAM at $118B by 2028 — BLZE only needs to capture single-digit basis points to materially scale.
Bear case
- · Existential competition from AWS, Google Cloud, and Azure with vastly greater scale, bundling power, and ability to undercut on price; BLZE remains subscale at ~$146M revenue.
- · Accumulated deficit of $221.6M and still GAAP unprofitable; forward P/E of 70x and EV/EBITDA negative leave no margin for execution slips.
- · Stock at $11.69 trades meaningfully above the $9.34 consensus mean target and even above many street targets after the ~47% single-day move — momentum-driven valuation.
- · CoreWeave deal includes partner warrants creating dilution overhang; concentration risk in a single large customer that itself depends on AI capex cycles.
- · Operational fragility: October 2025 data center cooling failure and a documented history of material weaknesses in internal controls — either could resurface and damage trust.
- · Debt/equity of 73.7 and only $29M cash against $61.6M debt — limited balance sheet cushion if growth investment needs to accelerate to defend the CoreWeave win.
- · April 2025 extension of data center equipment useful life flatters reported margins through lower depreciation — a non-cash optical benefit, not underlying improvement.
Catalysts
- · Next earnings on May 4, 2026 — first full quarter reflecting CoreWeave deal economics and updated FY guidance.
- · Disclosure of additional neocloud or AI infrastructure customer wins via the Powered by Backblaze program.
- · Progress toward the 26% EBITDA margin target; any incremental margin guide-up could re-rate shares.
- · Further sell-side upgrades or initiations following the AI repositioning — coverage is still thin at 7 analysts.
- · Potential refinancing or expansion of the $30M Citizens Bank revolver to fund AI capacity buildout.
Key risks
- · Hyperscaler price compression on object storage — a single AWS S3 price cut could compress B2 unit economics.
- · CoreWeave contract execution risk: capacity buildout, SLA performance, and warrant-related dilution.
- · Recurrence of internal control material weaknesses, which would damage credibility at a critical re-rating moment.
- · Valuation reset risk: stock has tripled from 52-week lows ($3.26) and trades well above consensus — momentum unwind on any disappointment.
- · Cash runway and capex intensity if AI workloads require accelerated 400G network and storage hardware investment.
What to watch
- · May 4, 2026 earnings — B2 growth rate, EBITDA margin trajectory, and CoreWeave revenue recognition timing.
- · Updated FY26 guide and any commentary on partner warrant dilution math.
- · Technical levels: $10.86 (prior 52-week high, now likely support) and reaction to consensus target zone $9-10.
- · Any new AI/neocloud customer announcements beyond CoreWeave.
- · Hyperscaler pricing actions on object storage that could pressure B2 unit economics.
- · Cash burn/FCF trend and any draw on the $30M revolver.
Key metrics
Price target rationale
Base case ~$12 assumes ~5x forward P/S on ~$175M FY26 revenue with continued EBITDA margin expansion toward the 26% target. Bull case ~$17 reflects CoreWeave ramping faster, additional AI logos, and a re-rating to 6-7x sales as profitability becomes visible. Bear case ~$6.50 (in line with analyst low) reflects hyperscaler price pressure, dilution from warrants, or any reversal in the loss-narrowing trajectory, with multiple compressing toward 3x sales.
On Wall Street's view (mixed): The $9.34 consensus mean target predates full appreciation of the CoreWeave deal and raised guidance, so it likely understates fair value; however, the stock at $11.69 has already overshot consensus, and the $15.9 street high looks like the more relevant upside anchor. We see fair value in line with the high end, not the mean.
Latest filing (10-K)
Backblaze is a subscale but accelerating cloud storage alternative to hyperscalers, cutting losses sharply to $25.6M in 2025 while B2 Cloud Storage grew 26% on AI demand, but profitability remains distant and competition from AWS, Google, and Azure is existential.
Backblaze is a cloud storage platform offering object storage (B2 Cloud Storage) and computer backup (Computer Backup) services to over 500,000 customers across 175 countries. The company makes money through recurring subscription and consumption-based fees, with B2 Cloud Storage operating on a pay-as-you-go or committed-contract IaaS model and Computer Backup sold as a flat-rate SaaS subscription. It positions itself as a lower-cost, high-performance alternative to hyperscalers like AWS, Google Cloud, and Azure, managing approximately 5 billion gigabytes of data and over 1 trillion files.
What the news says · bullish
The dominant storyline is Backblaze's landmark $335M AI storage contract with CoreWeave, announced June 23, which sent the stock surging ~20% and triggered an analyst upgrade from Craig-Hallum. This deal repositions BLZE from a niche cloud storage provider to a credible AI infrastructure play, lending substance to the 'AI contender' narrative. The backdrop is already constructive: Q1 2026 beat estimates, full-year guidance was raised with a 26% EBITDA margin target, and the stock had already rallied ~75% after the guidance lift. The CoreWeave deal adds a major revenue catalyst and partner warrants, though investors should note the warrants represent potential dilution and execution risk on a large contract remains. Coverage is reasonably broad and consistent, reinforcing the bullish read, though some items are thin aggregator mentions.
This analysis is from Jun 23, 2026. Markets move. Get the current read on BLZE and generate fresh AI research on any ticker.
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